Comments on: Suze Orman’s conflicts http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: henrykjames http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35210 Sun, 22 Jan 2012 00:15:48 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35210 The other side of this, which may not be important to all consumers, is what this type of card does to small business. Many merchant account companies actually charge more to the business to process this type of transaction. You would think the opposite since the risk is lower, but this it is new, they charge a much higher discount rate.

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By: Sechel http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35113 Wed, 18 Jan 2012 10:55:06 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35113 Yes Suzie is conflicted, and I do like the sophistry in her retort to Vigeland. If Orman wished to disprove the AMEX argument she simply needed to point out multiple fees on that side. I don’t have any issue with Suzie getting into the card business or the FICO business except for how she downplays her for-profit over-plays her consumer fighting credentials. If someone has credit issues or financial planning issues they should go to a qualified fee based financial planner or seek the help of a reputable organization who isn’t selling product.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35101 Wed, 18 Jan 2012 01:53:48 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35101 AHooks, don’t argue with a religious fanatic. Felix believes firmly that the goal of investing should be to maximize expected return. We can reasonably postulate that it is impossible to “beat the market”, so he worships at the altar of broad-based index funds.

My purpose for investing is to turn a sizable nest egg into a comfortable retirement. If my annualized returns exceed inflation by 3% over the next thirty years, I will be in excellent shape. I couldn’t care less what the market does, as long as I reach (or at least come close) to my targets.

The strategy Malkiel outlines is essentially what I’ve been advocating for the last couple years. A portfolio of high quality dividend stocks is both less volatile AND offers higher returns than your traditional 60/40 split of index funds. Moreover, by holding real assets, it offers protection against inflation that could destroy bonds.

Will it beat the market? Probably not, but do I look like I care?

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By: AHooks http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35097 Wed, 18 Jan 2012 01:20:12 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35097 “index funds are no longer going to be the way to do things, you need to buy ETFs with high dividend yields”

Felix, Do you have the same objection to Burt Malkiel’s WSJ article “The Bond Buyers Dilemma” in which he advocates high dividend stocks over bonds?

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By: thispaceforsale http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35095 Tue, 17 Jan 2012 21:49:12 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35095 Felix, I think you underestimate one of the selling points of the card- creating credit worthiness for individuals that the current fico system poorly serves. This is a leap of faith that 1-2 years from now may pan out. But it seems to offer a quicker alternative to building credit when one’s credit is bad or poor than the Amex card which is a halfstep, by comparison.
I also think it is a fine line to say a watchdog cannot be both a service provider and an impartial arbiter of justice. Full and open disclosure is paramount, but Orman already was earning a living by being a watchdog- a conflict of interest no different than a blogger that argues agains the works of other bloggers. There is money in all of these disagreements.

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By: Moopheus http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35092 Tue, 17 Jan 2012 19:29:19 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35092 Pretty much everyone in the financial advice business has an agenda and conflicts. Some are more obvious than others. But if someone is making money for basically giving an opinion, that money has to come from somewhere, and it is probably going to have some influence. Clearly, getting paid to promote a product is one of the more obvious ones. I mean, no one would shill for these things for free, right?

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By: Strych09 http://blogs.reuters.com/felix-salmon/2012/01/17/suze-ormans-conflicts/comment-page-1/#comment-35091 Tue, 17 Jan 2012 18:32:12 +0000 http://blogs.reuters.com/felix-salmon/?p=11898#comment-35091 I once signed up for a prepaid debit card for the sole purpose of handling incidental everyday purchases (I didn’t like the idea of swiping the debit card for my main checking account in unsavory locations or at no-name third-party privately owned ATMs) and being able to trace and separate that spending from the budgeted spending I could track via canceled checks.

I did a lot of reading the fine print of account agreements for various cards and decided on a card that worked best for me because of the entire universe of fees that these cards can charge, the way I was going to use the card would have minimized the actual fees I was going to have to pay using the card I settled on. For example, this card charged a high fee for getting cash back during a point of sale transaction at a retailer. That didn’t bother me, because I never get cash back when I’m purchasing something.

Got the card and lo and behold, when I tried to transfer money to it (my regular paycheck is deposited via direct deposit to my checking) my bank would not in any way facilitate transferring money to that account electronically because they didn’t recognize the vendor of the card as a legitimate financial services company. So the only way to put money on that card, besides using an ATM and the associated (high) fees, was to use MoneyPak and then incurring the fees associated with that.

I closed the account shortly thereafter. The AmEx card was my backup choice, but I haven’t opened an account with them because as Felix says, you’re limited to places which accept AmEx, which where I live is a small universe.

The bottom line is that there isn’t really a “best” prepaid card with the lowest fees in the absolute sense; you have to figure out which fees are going to impact you the way you’ll use the card in the real world.

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